Xerox Split A 'Positive Surprise' On Wall Street

Xerox Corp XRX shares rose 4.6 percent Friday after the company announced it would be splitting into two publicly-traded companies.

Xerox CEO Ursula Burns said the move to split the company into a business process outsourcing operation and a document technology company is the best path forward for Xerox.

“We came to the conclusion that given the strength that both of these businesses have, combine that with changes in the marketplace, with changes in the industry, competitor set, that it’s probably best for us, it’s best for us to be separate companies,” she told Bloomberg.

Related Link: Carl Icahn Tweeting Up A Storm About Xerox Split

Burns also noted that, despite initial speculation, activist investor Carl Icahn was not consulted on the matter nor was he the driving force behind the decision.

JPMorgan analyst Tien-tsin Huang calls the decision a “positive surprise,” but doesn’t see an immediate impact to Xerox’s valuation. However, he believes the move “does allow for greater focus at a time when industry forces are changing quickly."

JPMorgan maintains a Neutral rating on the stock.

Disclosure: the author holds no position in the stocks mentioned.